Consumer Electronics

Mark Zuckerberg Hopes to Make Every Android Phone a Facebook Phone

Mark Zuckerberg unveils the smartphone software called Home, in Menlo Park, Calif. on April 4, 2013

For the past few years, technologypunditshavespeculatedabout the existence of a secret Facebook phone—a smartphone specially designed and manufactured by the company behind the world’s largest social network.

Today Facebook Chief Executive Mark Zuckerberg unveiled his intentions at Facebook’s headquarters in Menlo Park, Calif., and they are actually far more audacious: Facebook (FB) wants to turn every Android phone into a Facebook phone.

In a press conference, Zuckerberg unveiled Facebook Home—a service that users must upload to their Android phone that customizes its interface to highlight the social network and connections among the user’s friends. “We are not building a phone, and we are not building an operating system,” Zuckerberg said. “But we’re also building something a whole lot deeper than just an ordinary app.”

The new Facebook service is what the mobile industry technically calls a launcher—software that changes the appearance of the phone and hosts other apps on the device. Phone manufacturers such as Samsung Electronics (005930:KS) and HTC (2498:TT) use launchers to customize their Android smartphones and put some of their own services on the home screen.

Now Facebook is getting into the action. For user’s who download Facebook Home, the software turns the phone’s home screen—valuable real estate that Zuckerberg called “the soul of a phone”—into a version of the social network’s newsfeed, featuring photos and a constant flow of updates from friends. Facebook is also using Home to highlight a version of its messenger service, which it calls Chatheads and which can be used as a substitute for traditional SMS text messages and e-mail. Advertisements will come to the service as well, though not right away.

Zuckerberg said Facebook Home will be available for Android phone owners in the U.S. to download from the Google Play app store on April 12. A tablet-oriented version will come later, he said. The company is also working with manufacturers to preload Home into their handsets. Taiwanese manufacturer HTC introduced the first such device, appropriately dubbed the HTC First. The phone, a nondescript touchscreen smartphone that comes in four colors, goes on sale next week for $99.99. “It’s clear Facebook has created a truly unique service,” said Peter Chou, the chief executive of HTC, at the event.

Users who buy the HTC First or install Facebook Home can still access other apps, such as Netflix (NFLX), Gmail or Google Maps, but they’re required to navigate to a secondary screen. “Today our phones are designed around apps and not people,” Zuckerberg said. “We want to flip that around.”

Since Facebook’s lackluster initial public offering almost a year ago, investors have worried about Facebook’s reach into the rapidly growing world of smartphones. But recent research shows the company’s position is surprisingly strong. Flurry, a company that measures the use of apps on smartphones, reported earlier this week that Facebook accounts for 18 percent of the time U.S. consumers spend on smartphones, or an average of more than 28 minutes per day. EMarketer estimates that Facebook will earn $1.53 billion in mobile advertising this year, more than double last year—and 11 percent of all mobile ad dollars worldwide spent this year.

Still, anxiety has permeated the social networking company about the seismic changes taking place in high tech. As consumers increasingly access the Web and connect with their friends via smartphones, Facebook has found itself in a position where two of its most significant potential rivals—Google (GOOG) and Apple (AAPL)—controlled the mobile experience, with Android and iOS, respectively. Last year, Facebook struck a partnership with Apple to integrate its services into iOS, though Apple does not allow a similar takeover of the iPhone’s home screen.

Facebook is now yet another company to build its mobile ambitions on top of Google’s philosophy of openness with Android. The search giant allows anyone to tinker and customize the Android mobile operating system. Amazon (AMZN), with its Kindle Fire tablet, has pursued a slightly different strategy, creating its own version of the Android operating system.

Facebook’s move also puts Google in a similarly peculiar position—one in which it finds itself boosting its chief rivals. “It does put Google in a box, in the sense that, after Amazon, and of course the Chinese vendors, Facebook is the next big player to tinker with Android in a way [that] makes Google less relevant,” says Chetan Sharma, a mobile industry consultant. “They are using Google’s investment to prop up their services.”

Zuckerberg was asked at the event by blogger Om Malik whether he was concerned Google could change the rules of Android. “Anything can change in the future, but we think Google takes its commitment to openness in this ecosystem really seriously,” Zuckerberg replied. “Their operating system really is designed from the ground up to support these things. It’s theoretically possible they [could] go back on their commitment to openness, but I don’t think they will. It would have to be a complete 180 in their philosophy of openness to the community.”

Stone is a senior writer for Bloomberg Businessweek in San Francisco. He is the author of The Everything Store: Jeff Bezos and the Age of Amazon (Little, Brown; October 2013). Follow him on Twitter @BradStone.